Do you pay interest if you pay your card in full & on time?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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Do you pay interest if you pay your card in full & on time?

Postby BrokenVelocity » Sat Apr 21, 2012 2:10 pm

I have never had a credit card or have any kind of credit history, I do have a savings, checking and a 5 year CD with Citi. I will be paying about $700 in bills a month that I was planing on using my debit card to pay, but I thought this maybe this best time to build some credit and maybe even earn some miles or rewards of some sort.

I am planning on paying the full $700 a month that will be on my credit card with my debit card, leaving no balances, you only pay APR on stuff that you owe, right? No balance = No APR?

Sorry it may sound like a stupid question but I'm a total novice at this. I did make an effort with Google but all I got was a headache trying decode the language the credit card rules are written in.

I'm planning on heading to down to my bank and speak to someone about opening a card, I was thinking of going with Citi because I have an account in good standing there thinking maybe they would look upon my request more favorably. Best course of action, right? A gas or department card would be useless to me.

BTW I'll be 25 in a few months if that helps.

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Postby FastSRT8 » Wed Apr 25, 2012 2:18 am

If you pay in full and on time, you should incur no interest. HOWEVER, the rules change IF you use a credit card for a cash withdrawal. I believe they charge you interest from the moment you pull the cash out! Please check this to be sure though. I don't pull cash from a credit card so am not an expert on this.
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Postby DavidNY » Wed Apr 25, 2012 11:48 am

As long as your card has a grace period you're fine, with the caveats FastSRT8 covered.

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Postby FinanceGourmet » Tue May 01, 2012 1:58 pm

Read the card agreement. What you are talking about is the Grace Period of the card. So long as the card starts the billing month without any unpaid balance from the previous month, then you will have interest free for the duration of the grace period each month. In other words, if you pay it off each month there is no interest. However, that all ends if you are late, you go over your limit, or you get a cash advance. Also, if there is an annual fee, you pay that no matter when you pay off your balance.

Keep in mind using a PIN number means a cash advance, even if you are buying something. Always press CREDIT and never enter your PIN. In fact, I shred the PIN notification without remembering it. That way I can't even use the PIN without having to call them first.

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